Your Fx Trading Platform - What Components You Need And What You Don't

Whatever fx trading platform you start to trade currencies with, get to know it very well, for it will have a great influence on how successful or otherwise you are. There are a number of platforms that are used by traders and brokers, and this article will discuss the components of most platforms, and which of them you definitely need and which you can safely do without.

The most obvious element in any platform is the ability to open and close trades, place stop loss and limit order levels, and so on quickly and easily. But what about all the tools that help you decide how to trade?

We'll start with the chart itself. It should give you the choice of at least two kinds - a "candlestick" chart and a "OHLC" chart. Both of these show the same information but in a different way. The important thing is that you can see at a glance what level the price was when the period opened and when it closed, whether it closed higher or lower than the opening level, and what the highest and lowest prices were.

You will want the ability to vary the period covered by each candlestick, from 5 minutes, up to a month or more, and to be able to extend the chart back so you can look at historical data covering at least 4 or 5 years. Most modern platforms, such as MetaTrader 4 and myForex, more than cover all these points.

As for the indicators, most platforms boast an impressive array, from the Simple Moving Average, to Bollinger Bands, the fibonacci, MACD and oscillators to trade volume. The trouble is that if you load too many such indicators onto your charts you'll spend so much time trying to interpret them that you'll hardly ever open a trade.

The only option is to experiment with them on a demo account. Virtually all brokers offer demo accounts, so you can practice without risking real money. This brings us to a piece of equipment that you must have, aside from your trading platform, and that is a notebook. Keep a note of all your trades, even those on a demo account. This will prove invaluable for dissecting your trades after you've closed them, whether successfully or otherwise.

However, it has to be said that most of the successful financial traders don't use most of the various indicators that come with the typical fx trading platform. They tend to use only the Simple Moving Average. You can have more than one SMA, and over whatever periods you wish.

For example, you might have a 9 period SMA and a 40 period SMA. If the price has been trading below both SMAs and it then crosses both going sharply upwards then that is often a signal to buy.

With all the indicators and other tools available on most platforms, there's a lot to learn. But much of what you may feel you need to learn can in fact be dispensed with. You can take a short cut by getting to know how the few successful traders trade. Just find one who is prepared to help you, and you're well and truly on your way to success.

By: pegweb

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Philip Gegan is a retired UK lawyer who has studied the financial markets since 1991. You too can make profits such as 70% in less than a week on gold at www.onlinefinancialtrading.com